talanx group annual report 2011 en

Overall assessment of
the economic situation
Non-financial
performance indicators
Summary of cash flow 2011 2010 1) 2009 1)
Corporate Governance Remuneration report Events of special
significance
Figures in EUR million
Cash flow from ongoing operative activities 3,837 4,650 5,472
Cash flow from investment activities –2,976 –5,652 –5,072
Cash flow from financial activities –510 553 –129
Change in cash and cash equivalents 351 –449 271
1) Adjusted on the basis of IAS 8
The cash flow from operating activities, which also includes inflows
from the investment income generated, dropped significantly
year-on-year to EUR 3,837 (4,650) million. The calculation adjusts
the net income of EUR 897 (667) million in the consolidated cash
flow statement to allow for the increase in the technical provisions
(net perspective) (EUR 4.2 (3.9) billion). The reasons for this development
were the rise in the benefit reserves in the Retail Germany
and Life/Health Reinsurance segments and a significant increase in
the claims reserve driven by the Non-Life Reinsurance segment (see
also our explanatory remarks in the section describing the financial
position).
The appreciable decrease with respect to the changes in funds held
and in accounts receivable and payable in an amount of EUR 2.3 billion
is almost offset by the change in the funds held and in accounts
receivable and payable under financing activities in the amount
of EUR +2.1 billion. On the bottom line, the drop in the cash flow
from ongoing operative activities in the amount of EUR 813 million
is mainly due to the decline in the changes in other non-cash
expenses and income in the amount of –EUR 1.3 billion and is due
above all to the change in the technical provisions in life insurance
insofar as the investment risk is borne by the policyholders;
these provisions had increased sharply, particularly in 2010 (see
the corresponding development in the cash flow from investment
activities). The change in the funds held and in accounts receivable
and payable results from the furnishing of collateral by reinsurers.
Please see the comments on the development of investments.
Risk report Forecast and
opportunities report
The cash outflow from investment activities is determined by
payments made in purchasing investments. As in the previous
year, the outflows associated with the purchase of investments
amounting to EUR 3.1 (4.2) billion exceeded the inflows from sales
and maturities. In addition, there were changes in investments for
the account and risk of holders of life insurance policies totalling
EUR +63 (–1.394) million. Of the previous year’s outflows, an amount
of EUR 1.2 billion derived from increased investments in these assets
in the Retail Germany segment. In the year under review, that segment’s
outflows of EUR 133 million were offset by inflows from Retail
International.
The cash inflow from financial activities in the year under review
came mainly from net changes in the other financing activities in
the amount of –EUR 328 (719) million. The increase in the previous
year had been attributable above all to the issue of subordinated
bonds and to bank borrowings and notes payable. The cash outflow
in the year under review was mainly in respect of payment of
dividends in the amount of EUR 183 (162) million and the repayment
of a subordinated liability in the amount of EUR 138 million in the
first quarter of 2011. On balance, the capital outflow from financing
activities was EUR 1.1 billion lower than in the previous year.
In the year under review, the cash and cash equivalents increased
by EUR 305 million in all to EUR 1.6 billion. An amount of
EUR 42 (27) million was deducted from the cash and cash equivalents
for disposal groups pursuant to IFRS 5.
For further information on our liquidity management please see
the section of the risk report on the liquidity risk on pages 109 et
seq.
Financing
Along with funds from changes in shareholders’ equity as described
above and the assets available to cover provisions and liabilities,
the Group has at its disposal the following lines of credit that can be
drawn upon as required:
Talanx Group. Annual Report 2011
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